On May 21st, 2024, the TRNC Government introduced new laws regarding the purchase of immovable property in Northern Cyprus. These regulations impact both future property buyers and those who have already acquired property before the law was enacted. Here's a summary of the main points:

1. Unregistered Contracts of Sale:

• - buyers who signed Contracts of Sale before the law but haven't registered them with the Land Registry must do so within six months of the law's enactment. Failure to register contracts will result in a criminal offense for the vendor, punishable by a fine up to 500 times the gross monthly minimum wage.
• Permission to Purchase Not Applied For:
  Buyers who have not applied for the permission to purchase must ensure that they apply within six months of the law's enactment. Not applying within this period of time will result in a criminal offense, punishable by a fine up to 500 times the gross monthly minimum wage.
• Pending Permission to Purchase:
  Buyers must complete their title transfer within six months of receiving the permission to purchase. If ongoing payments are due from the purchaser, the six-month period starts after the final payment. Both parties must pay their transfer taxes within sixty working days to avoid the permission becoming void. Reapplication for permission, if needed, involves double the usual fee, and a third application will not be accepted if the title is not taken within six months of the second permission.
• Granted Permission but Title Not Taken:
  Buyers with granted permission must take title within six months of the law's enactment, or the permission and contract registration will be void, resulting in criminal offense charges and fines up to 500 times the monthly minimum wage. However, if the title transfer isn't possible within the six-month perioddue to pending property approvals such as the availability of the individual title deeds or the approval of the property has not been attained, both parties, being the vendor and the purchaser must pay transfer taxes within sixty working days of the permission to purchase being granted to maintain the permission.

2. Ownership of Multiple Properties:

• Purchasers who have acquired more than one property in their name face specific requirements under the new legislation. Foreign purchasers who exceeded their allowed property acquisitions before the law's enactment must inform the Ministry within six months. Upon notification, they must pay a fee amounting to 1% of the Contract price. Failure to notify within this period increases the fee to 3% of the Contract price.
• These purchasers then have twenty-four months from the end of the initial six-month notification period to transfer these Contracts of Sale out of their names. Any Contracts of Sale not adjusted to comply with the law within this timeframe will become void.
• During the transfer of these Contracts of Sale, a fee equivalent to half the capital gains tax (stopaj) payable by the seller must be paid. If these Contracts of Sale are not transferred or adjusted in accordance with the new law within the stipulated timeframe, both the purchaser and the seller commit a criminal offence and may be fined up to 500 times the gross monthly minimum wage.

3. Ownership through Trust Agreements:

• From the enactment date, non-citizens cannot use trust agreements to purchase more properties than allowed. Violating this results in criminal offenses and fines up to 500 times the gross monthly minimum wage.
• Existing trust agreements must be registered at the Land Registry within 75 days, or they will be void, and the involved parties will face similar fines and charges.

4. New Property Purchasers:

• Provisions concerning new property purchasers stipulate that following the introduction of the new law in Northern Cyprus, specific rules now govern prospective buyers. Effective immediately upon the law's enactment, non-citizens are authorized to acquire certain types of properties:
  • These include a single plot of vacant land, limited to a maximum area of 1338m2.
  • In the case of apartments, non-citizens may purchase one unit, with an allowance for up to three units for citizens of the Republic of Turkey.
  • For individual houses, non-citizens can buy one house with a plot size not exceeding 3300m2.
• the acquisition of agricultural or forestry land is strictly prohibited for foreign purchasers under the new regulations. Violating these property acquisition limits is considered a criminal offence. Offenders could face fines of up to 500 times the gross monthly minimum wage.
• non-citizens are prohibited from purchasing properties with shared title deeds. However, non-citizens can still purchase apartments or individual houses with up to three co-owners on a shared title basis.
• the sale and transfer of properties without individual or storey easement title deeds ('Kat İrtifak Koçanı' in Turkish) are now prohibited. Any Contracts of Sale for such properties will be considered void.
• Anyone who sells a property with a shared title to a non-citizen, makes a Contract of Sale for a property without an individual or storey easement title deed, or assists in the sale or transfer of such properties commits a criminal offence. The penalty for these offences is a fine of up to 500 times the gross monthly minimum wage.
• For new developments without existing building permits or without pending permit applications before the new law came into force, at least 20% of the units must be sold to nationals of the TRNC or the Republic of Turkey. No more than half of the units can be sold to first-degree foreign relatives or foreign purchasers of the same nationality.
• Previously, companies with a majority of TRNC citizens as shareholders and directors were considered ‘local companies’ and exempt from property purchase restrictions. However, under the new legislation, any company with non-citizen shareholders, non-citizen majority directors, or where the majority of the voting rights are controlled by persons acting on behalf of foreign nationals, is now considered a ‘foreign company’ and subject to the new property acquisition restrictions.
• All new Contracts of Sale entered into after the new legislation's enactment must be registered at the Land Registry within seventy-five days, otherwise they will be void.

For further advice on the above you can contact us at [email protected]